The research firm said this marks a tripling from the 2013 levels.

Its senior Asean economist, Lavanya Venkateswaran, said Malaysia, as one of the Asean-6 economies alongside Indonesia, the Philippines, Thailand, Singapore, and Vietnam, has benefitted from the diversification of global and regional supply chains, as well as the adoption of ‘China+1’ strategies.

She said the net FDI inflows into Malaysia were highest in the services and manufacturing sectors, implying that these sectors have been major recipients of inflows.

“Data compiled by the American Enterprise Institute and the Heritage Foundation shows that the bulk of investment from China has been directed towards the energy, technology, and transportation sectors,” she said in OCBC’s latest report on Asean-China FDI released today.

To recap, Lavanya said in April 2023, Chinese firms pledged around RM170 billion in investments in Malaysia and signed 19 memoranda of understanding (MoUs).

This was followed by commitments of RM19.84 billion in September 2023.

“These suggest a strong pipeline of FDI commitments from China into Malaysia.

“Further commitments are likely to be made at the Malaysia-China Summit 2024, which runs from Dec 17 to Dec 19, 2024,” she said.

Lavanya noted that foreign capital investment approvals, a proxy for approved FDI, have been flowing into Malaysia.

“The source of the inflows has become more diverse in recent years, underscoring the broadening role of Malaysia in regional and global supply chains.

“Inflows from the EU, other Asean countries, the US, Japan and China have improved in recent years,” she said.

Regionally, Lavanya said FDI inflows into the Asean-6 economies have been gaining traction, rising to US$236 billion (RM1,109.67 billion) in 2023 versus the annual average of US$190 billion (RM893.35 billion) in 2020-2022.